Opinion

The challenges of South Africa’s sports betting industry

Over the past few decades, betting in South Africa has become more accepted over time – both culturally and legally. After many forms of gambling became legal in the 1990s, the cultural acceptance began to follow suit.

Today, betting platforms like the Betway app are showing that it’s not just casino gaming and traditional gambling that is accepted, but wagering sports too. Despite this, many challenges remain for both bettors and the betting companies…

Saturation: Too Much Choice; Too Much Competition

The betting industry is suffering from almost the opposite problem that it had in the 1990s – it’s too popular. The digitisation of sports betting has meant that it’s incredibly easy to set up a betting platform, practically speaking. Whilst there are still many regulatory and legal hurdles, it’s just a matter of setting up a website and choosing a betting systems provider.

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The problem is also reflected onto the customer in that there are many options. Generally, this has resulted in fierce competition, and some interesting tactics to gain the attention of punters. Mostly, it has meant that promotions are the norm, so while this is a bonus for customers, it comes at a price for betting firms. Without free handouts, it’s next to impossible to survive, and this is directly eating into profit margins.

Technology: The Burden of Innovation

Similarly, growth in technology has also been both a blessing and a curse. It’s become easy to start a betting company due to the democratization of technology, but it means that it’s hard to operate as one. 

At some point, throwing bonuses at customers hits a limit before it becomes unviable. The betting industry in South Africa has already reached this point, and so the next point of differentiation has become what kind of features and bets you offer. 

This has spurred on a race for convenience, with some sports betting firms paying for the right to stream games, or share team news. Being able to cash out and bet in-play is now expected from customers, and firms are having to constantly think of new ways to impress bettors. 

Is Betting Good or Bad For The Economy?

For policymakers and politicians, betting has been a sticking point in South Africa. There are a lot of effects that the legalization of sports betting brought about, with some experts seeing it as a boost to the economy, while others see it as a threat. 

There has undoubtedly been job creation and tax revenue generated from the rise of sports betting in South Africa, but for some, it comes at a social cost, or even an economic cost for customers. 

In the example of the UK, which legalized sports betting before South Africa (and was therefore a good point of reference for policymakers), betting continues to make large economic contributions, such as 110,000 added jobs and £4.2bn in taxation.

Final Word

As sports betting continues to become a culturally accepted activity in South Africa, the implications are far-reaching. It is becoming increasingly difficult for firms to compete, as the market becomes highly saturated. This bodes well for customers in terms of getting better features and bonuses, but it can still create a headache of too much choice. It also raises concerns about the impact betting has on the economy, though for policymakers, it seems to be having more benefits than drawbacks.

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